Here’s how the Calgary real estate market in January stacked up compared to January’s of previous years.
The following chart is combined sales (SFH’s and Condos) as this stat used to be recorded as one by CREB.
The chart below depicts median and average condo prices in January since 2004.
The chart below depicts median and average prices in January for Single Family homes:
Will these YoY gains continue into the spring and summer months, when prices reached MLS record highs in Calgary 2007? Will they approach those highs again? What do you think?
Below are the month-end inventories for the past few years. In October 2007, we had a month-end inventory of 5517 Single Family Homes, and 2329 condos so it shouldn’t be a surprise that the inventory will continue to rise as many of those homes were taken off the market to be relisted later (now, or in spring)
We currently have an approximate 4 month supply of SFH’s, and a 5 month supply of condos listed in Calgary (rough approximation: January sales divided by January active listings). Is that enough supply & demand pressure to affect prices?
Mike:
Thought I’d toss my two cents towards your question.
I will be nothing short of amazed if YoY gains continue past February. In fact I might consider asking for my money back from my economics degree. Price is a function of supply and demand. As much as certain elements are trying to spin things by referencing useless 7 and 10 year averages (is this the next trick up CREB’s sleeve, now that they’ve already excluded bedroom communities, switched to focusing on the median, and created some crazy annual average of sale price??), here are the facts (ignoring the effects of the last day of this month):
-SFH sales are down 31.3% year over year (2nd lowest sales in at least the past 25 months)
-SFH listings are up 25.9% year over year (7th highest listings in the past 25 months)
-SFH inventory is up 116.3% year over year
-Condo sales are down 41.2% year over year (also 2nd lowest sales in at least the past 25 months)
-Condo listings are up 35.0% year over year (absolute highest in at least 19 months)
-Condo inventory is up 122.1% year over year
Incidentally none of these trends seem to be changing direction (as much as all the bulls said to disregard early numbers because early January is always slow). Some people are “amazed” at how well the market has stood up in the face of such grim statistics. Personally, I’d be shocked if prices were to fall much in early spring. There’s enough of a herd mentality in this city that “prices always go up in the spring” that many people still feel they need to get in now before they are “priced out forever” and pay accordingly.
Going forward though, these are not sustainable trends. I am very interested to see what happens post-April if these trends continue. Anyone who’s been following the mess south of the border knows that the first indicator was the plunging of sales coupled with the accompanying surge in inventory (sound familiar?). As cute as anecdotal evidence is that there are masses of people waiting somewhere to see what prices do before they buy it…i like cold hard data better. The data currently shows that homes in this city have been overbought.
The fact that this year’s stats are “in line” with some 7 or 10 year average is pointless. Calgary’s population today is 15% bigger than it was in 2001. If sales are no more this year than they were in the doldrum market of 2001 or 2002 – I don’t think that classifies as “balanced”. And if we’re using multi year averages of sales to show that everything’s A-OK, why not use multi year averages of prices?? Now those would be some interesting numbers.
So I’m expecting more tiny gains in Feb and possibly March, leading to year over year price declines by April. That information, coupled with what looks to be mammoth supply and tiny demand can only mean one thing – prices will start to fall (again). How much they will fall before inventory starts to be absorbed at a healthy rate is a question I don’t have the answer to.
Since Bob’s blog is not up and I refuse to post over on the “other” blog, I just wanted to vent about Mr. Truman’s recent cheerleading of the market. Nothing like ignoring the inventory and sales and concentrating on such crucial statistics as “Days on Market”. There are so many de-lists and re-lists in this market that DOM is possibly the most useless figure you can calculate. Or using the wrong number for calculating how much inventory came onto the market in January (we started the month with 3,364 homes, not 3,731 – a difference of over 10%). And the last time I checked, 4 to 5 months of inventory is not a “balanced market”.
I thoroughly enjoyed your post Mike “What will happen to Calgary prices in 2008″. I thought it was balanced in showing both sides and asking some good questions. I hope you keep up the good work Mike, and keep reporting the facts without interjecting opinion on cherry picked statistics. Basically if you just keep on with the fine work you’ve been doing, I think you’ll be doing a great job.
Hello Warren,
Thank you for your comments and sharing your insight!
When comparing trends & prices, what do you think is an appropriate time frame?
Mike:
Thanks for responding!
In regards to your question of what an appropriate timeframe is to consider trends and prices, I honestly don’t know. I’ve only been in Calgary for a year and a half but some people I work with have lived their whole lives here and say that the city is nothing like it was five years ago. So can we use data from that period or before for comparison?
My whole problem with trying to downplay the last couple years (by averaging them into a multi year average) is that the prices we have are a direct result of the last couple of years. If sales go back to 2001 levels, are our current prices sustainable, or would we see a decline?
Basically, I think that I would keep the focus on simple year over year comparisons. Things like population and wages are changing so much, I think anything else would hazard being outdated data.
That being said, Mr. Truman seems to be hinting in his newest post that the CREB is going to (yet again) change the criteria – this time to “year to date” prices. Grrrrr…whatever happened to “honesty is the best policy”?
Mike:
One more quick question for you. I tend to believe that all additional data is helpful (even if it’s just noise, you can ignore it), so I do appreciate all the additional info you post.
What is the timeframe of the “conditionally sold” homes? One week, two? When would those homes transition into the “total sold” category, or is there no set rule and it varies home to home?
Also, how do you arrive at the “vacant/new construction” number? Does the CREB keep tally of this or is this from your own inspection?
Warren, there is no specific or set time period for a C/S sale. You could probably estimate 1 or 2 weeks as an average. It just depends on the condition and how much time needs to be allotted for it.
The condition can also be waived sooner, or pushed back to allow for more time.
The C/S switches to a “Sold” the day that all conditions have been waived by both buyer and seller.
Regarding the Vacant/New Construction stat – at the time the MLS listing is entered, the Listing Agent has to specify which category it falls under: Seller occupied, tenant occupied, vacant, new construction, etc.
Just a quick sneak peak. There are currently:
330 Pending SFH’s
——————–
Median: $426,200
Average: $461,906
(3 are listed at over $1 million)
167 Pending Condos
——————–
Median: $299,900
Average: $341,099
(3 are listed at over $1 million)
Mike,
First of all thanks for the work you put into this site.
Bob Truman mentioned something about how the CREB reports month end inventory now not including expires. How much did this change the total by?
Do you know when the change was made?
Hello Bearclaw,
January 31, 2008 had 185 SFH, and 82 Condos expire.
December 31, 2007 had 465 SFH, and 161 Condos expire.
I’m not sure when these changes were made by CREB. To have a more objective number, perhaps keep track of the Total Active Listing number a day before month end.
Week in Review
February 1 – 7
(with 2007 stats as comparison)
Calgary SFH Statistics
———————–
Total Sold
2008: 281
2007: 489
Median Price
2008: $435,000
2007: $402,000
Average Price
2008: $471,054
2007: $431,982
Average Price per Sq ft
2008: $306
2007: $289
Calgary Condo Statistics
———————–
Total Sold
2008: 128
2007: 231
Median Price
2008: $301,500
2007: $277,000
Average Price
2008: $312,596
2007: $294,480
Average Price per Sq ft
2008: $307
2007: $294
Warren, you’ve been in Calgary for a year and a half? And you are lending your opinions here? Those would be opinions I don’t thinc Calgarians should care about.
You’ve been lending your opinions here and slamming some of our best people here, while you’ve only lived in Calgary for a year and a half? We shouldn’t accept your distorted opinions. They are worthless.
I have no quarells with you Warren, but you just seem to come from a position of “wanting to fight”. We just come from the position of being Calgarians.
Why are you always attacking Calgarians, when you are not one of us?
I’ve posted stats and trends that will blow you out of the water. Why are you still hanging around here trying to bum us all out?
Al Bundy
I don’t need blog owner approval. That silly green blog owner approval expletive deleted is so bogus, and demeaning.I don’t need blog owner approval.
Mike Fotiou says: This is exactly the reason why this board is moderated. Please keep your comments respectful.
Can never get a post here, so I’ll just bail out now. How many of you have been given the same treatment here?
Mike Fotiou says: I have never deleted a comment to date, and all comments have been posted.
Alberta rocks, all comments are filtered through me to prevent rude, foul, comments or personal attacks.
All respectful opinions are welcome.
With regards the new Pending Sales statistic, please bear in mind a few things:
* To determine approximately how many new properties went C/S the previous day
1. Take yesterdays Pending Sales amount
2. Subtract todays Total Number Sold stat from above
3. Now compare that result with todays Pending Sales
The reason the Pending Sale number doesn’t fluctuate too much is because you have to take into account the amount sold. If the total Sold equals the total amount of new properties that went C/S the previous day, then the Pending Sales amount wont change.
* even when a property is Pending the DOM count continues until sold.
* not all C/S will eventually result in a Sold
* property may remain C/S for days or weeks
??????, lol.
Okay, I’m pretty sure that’s not Al Bundy posting… I’ve never understood people who use multiple ID’s or impersonate someone else’s…
That being said, thank you for your intelligent Albertan insight. Why don’t you look up how to correctly spell “quarell” and “thinc” and then get back to me, okay? There’s a thousand responses I could give to your post, but it’s just not worth it.
I feel sorry for some of the people that blog moderaters have to put up with. What’s sad is that if the “other” blog is any indication, these kind of angry attacks are only going to increase as prices continue to decline. Bears having been wrong has caused some of them embarrassment; bulls being wrong will cause some of them bankruptcy.
That being said, I did have a question for you Mike.
As Mr. Truman posted:
“People have been waiting to see what would happen in January and now they know. My phone is busy, and many other realtors I’ve talked with, report plenty of interest.”
Just curious if you are experiencing this also? It’s only 1/3 of the way through February, but sales look to be down even more than last month (a projected 37.7% in February compared to 27.7% in January).
Also, did the CREB change its January stats package from the preliminary one you had posted? I thought I remembered seeing a matrix of monthly activity going back multiple years. I don’t see it now on the release from the website?
Warren, since mid-January I’ve been getting a lot more calls and emails too. My clients have a lot of properties to choose from, so it’s taking longer showing all the homes they’re interested in. With all the inventory, it’s a nice change for my buyers not having to rush, or feeling pressured into making a decision quickly.
Yes, they changed their stats package from the preliminary one I posted. Specifically, January’s report is now half the size without that statistics table comparing past years (which I thought was great)
First 2 weeks of February in Review
February 1 – 14
(with 2007 stats as comparison)
Calgary SFH Statistics
———————–
Total Sold
2008: 586
2007: 1016
Median Price
2008: $422,000
2007: $406,000
Average Price
2008: $456,670
2007: $444,457
Average Price per Sq ft
2008: $288
2007: $296
Calgary Condo Statistics
———————–
Total Sold
2008: 265
2007: 485
Median Price
2008: $298,600
2007: $277,500
Average Price
2008: $315,975
2007: $294,802
Average Price per Sq ft
2008: $309
2007: $296
I saw Bob Truman quote Don Campbell, and I just had to chirp in here.
I’ve listened to Don Campbell for a couple of years now, although I’m not a member of his group, nor am I member of his website. But he’s never been wrong as far as I know, and I realize that Truman is aware of Mr. Campbell. That’s another reason I was so willing in the past, to post my opinions on Bob Truman’s website.
I’ve only disagreed with Don Campbell on his opinions of percentage increase, I’ve never disagreed with him on the selections of city. I still see him as being very accurate about city, but I still don’t agree with him 100% about increase rates.
In any event, it’s very powerful stuff. As you know, I’ve shut my mouth for the past 6 months or so, but I still have a very solid opinion. Shall I post it here?
Don Campbell looks at a bigger scene that we in Alberta do. It’s of primary importance that we listen to him.
To take that to a larger scale, I look at even bigger scenes… basically the world scene and right now I see horrific scenarios for a lot of people, in the USA and in Europe. Yet, Canada looks like a bargain. Anywhere in Canada looks like a bargain.
I still remember hearing from (and I won’t quote names), praising how stupid we were, in Canada for not buying in Florida. And that was only 18 months ago. I won’t reveal his name, out of respect. But it just pysed me off to hear him calling us names like that, when he was just dead wrong and we were just dead right.
Canada is still the only place where real estate has a chance to go up in value. And within Canada, Alberta is the most likely place where value will go up. And within Alberta, Edmonton and north of Edmonton is the area that has the most opportunity to explode in value.
That’s just my opinion.
Good luck to all of us in ’08 and ’09. We’re all in the same boat. Good luck to us all, an I think we should stay the course. Because if we don’t, Europe will buy us out in a heartbeat.
Al
I should disclose here. I used to be a realtor for ten years, and that ended in 2002. I’ve never met Bob Truman, nor do I know him, although I’ve spoken with him on the phone. He’s a hell of a nice guy.
I don’t know Nick Fotiou, nor have I ever met him, nor do I know anybody who does knows Mr. Fotiou.
I don’t know Don Campbell, nor have I ever met him, nor do I know anybody who knows Mr. Campbell.
I just post my own opinions from time to time. But I’ve pretty much shut my mouth when Bob Truman’s site shut down. Nothing more than that.
Al
Hello Al,
I appreciate your comments. Feel free to continue to post your opinions and viewpoints.
I just wanted to say that my name is Mike, not Nick. Although I must say I enjoyed his stay with the Calgary Flames
Hi Mike, Thanks for all the hard work that you do preparing the statistics.
I was wondering what the old criteria number of listings is as of today (before expiries).
I understand that Bob Truman and CREB have changed the way that inventory is reported so that it no longer includes houses that are delisted on the last day of the month. Am I understanding this correctly?
Do you feel that including or not including the delists is more accurate way of presenting the information of housing inventory in Calgary?
My personal preference was for inventory reporting methods to stay the same, so that people could make better decisions regarding making a buying or selling choice.
Thankyou.
Hello Radley,
Thanks for your comments, it’s appreciated!
As of 5:30pm today (February 29, 2008) there are 4977 SFH, and 2297 Condo active listings in Metro Calgary.
We should see a drop in the amount of active listings tomorrow since some listing contracts are set to expire today at midnight. When CREB’s February MLS stats package is released next week, I’ll have a better idea of how they have started reporting month-end inventory.
I agree that stat reporting methods should remain constant so that people can accurately compare the numbers from previous months and years.
As to whether not including expiring listings is a more accurate way of reporting inventory, I would have to say ‘yes’ it is. Technically, those homes are no longer on the market as of the next day (1st of the month) Only until a new listing agreement/extension is signed will the home be “active” again. (Note: when an expired listing is relisted, its DOM clock is reset to 0) I just wish CREB didn’t change their reporting method in mid-swing. Even if it “technically” isn’t accurate to report expiring listings, at least we had an equal comparison going years back.
If there is a significant difference between the number I posted here and CREB’s February month end amount, I’ll starting tracking the old criteria inventory numbers in my MLS stats archive so we can continue to make accurate comparisons.
Update regarding CREB’s month-end inventory reporting:
CREB’s February month-end numbers were:
SFH: 4985
Condo: 2301
which is inline of the numbers I had as of Friday evening of 4977 and 2297 respectively so I’m not sure there have been any changes to the way they report month-end numbers (Unless I’m missing something?)
Hi, thankyou for providing your insight and opinion regarding the delists and inventory at the end of the month.
It looks like there hasn’t been any changes to the way month-end numbers are reported (which I think is great news)!
Mike, what are the numbers in brackets under price/sft — this is something new on your website.
thanks for providing this info to the public.
Hello Matthew,
I’ll try explain this on my website shortly, but here’s a summary.
There are two ways to calculate average price / sq foot.
Simple Quick Calculation: Take the total sq feet sold and divide by the total average price (which is how I’ve been recording it)
Actual correct calculation: Take the average price / sq foot of each home individually, and then take the average of all those numbers.
Example:
2 homes sell.
Home #1 1000 sq feet, price: $300,000
Home #2 1500 sq feet, price $350,000
Using the simple calculation we would get: $260/ sq ft ($650,000/2500 sqft)
However, if we were to calculate it correctly:
Home #1 = $300/sq foot ($300k/1000 sq ft)
Home #2 = $233/sq foot ($350k/1500 sq ft)
Average Price / Sq ft = $266.5
Now you would take the average of home #1 ($300) and home #2 ($233), this would give us $266.5/sq ft compared to the $260 sq ft in the first calculation.
So the numbers in the bracket contains the second calculation method.
I’m just trying to figure out a way to explain this more clearly on my website….
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